(CNN) -- Facing increasing international criticism and the threat of sanctions, incumbent President Laurent Gbagbo of Ivory Coast said he would "sit down and talk" with his challenger in last month's presidential election.

Both Gbagbo and opposition candidate Allasane Ouattara claimed victory in the November 28 runoff election, but the African nation's Constitutional Council invalidated earlier results from the Independent Electoral Commission that declared Ouattara the winner, and Gbagbo was sworn in for a new term December 4.

"We will finally sit and talk," Gbagbo said.

But the political chaos has heightened fears that the Ivory Coast would once again plunge into the unrest and bloodshed suffered after a civil war broke out in 2002. The European Union has warned that Ivory Coast could face sanctions if the dispute is not resolved swiftly, and France has urged military and civilian authorities in its former colony to respect the will of the people.

On Thursday, the African Union suspended Ivory Coast from the organization "until such a time the democratically-elected president effectively assumes state power." The AU's move followed a call on Tuesday from the 15-member Economic Community of West African States for Gbagbo to acknowledge the results of the runoff and hand over power to Ouattara.

The organization also suspended the country from all of its decision-making bodies until further notice.

Observers say the threats of sanctions and financial isolation may be influencing Gbagbo. Young-Jin Choi, U.N. Secretary-General Ban Ki-moon's special envoy, met with Ouattara and said Gbagbo had agreed to meet with him. The United Nations, which had provided troops for security at Ouattara's hotel headquarters, added more troops.

Once a prosperous nation and a driving force in West Africa, Ivory Coast spiraled downward into instability after fighting erupted between the government-held south and discontented Muslim rebels living in the north. Thousands of people died in the conflict.

Ouattara, a former economist for the International Monetary Fund who served as prime minister, had been banned from previous races. He enjoys popular support in the rebel-held north, and Gbagbo has accused Ouattara of masterminding the civil war -- an allegation the challenger has denied.